The pundits have been predicting slot price declines yet after some pressure, slot ASPs remain resilient
There are a number of factors that should be pressuring slot ASPs. Yet as the chart shows, ASPs are climbing again after 2 ½ years of flattish pricing. We’re not ready yet to call an end to pricing pressure for the following reasons:
- Over the last 4 years, there has been a convergence movement between the best and worst performing products. Even the smaller fish are producing decent products (Ainsworth, MGAM, Aruze, Speilo). In 2008, we estimate the top 5 manufacturers accounted for 97% of shipments vs. 94% in 2011 and it continues to slip. We think that in 2012, the top 5's share will fall to below 90%, due to Spielo's large share of the Canadian replacements.
- Large new openings mean bigger discounts. New markets that are opening are lower priced markets.
- IL: mid $12k
- Canada: better than IL but likely below $14k
- Given the poor macro environment, there is some trading down for product that has less bells and whistles, unless the game is really a hit
